Fast Stochastic Crossing and Stop Loss

Fast Stochastic, also known as the Fast Stochastic Oscillator, is a technical analysis indicator used to measure the momentum of a stock's price. The oscillator compares the closing price of the stock to its price range over a specified period of time, typically 14 periods.

The Fast Stochastic oscillator is calculated by taking the difference between the current closing price and the lowest price over the specified period, divided by the difference between the highest price and the lowest price over the specified period. The resulting value is then multiplied by 100 to produce a percentage value between 0 and 100.

Traders often use the Fast Stochastic oscillator to identify potential overbought or oversold conditions in the stock. Readings above 80 indicate that the stock is overbought and may be due for a correction, while readings below 20 indicate that the stock is oversold and may be due for a rebound.

This is a modification of "Fast Stochastic Crossing" strategy where a stop loss sell signal is added. Stop loss signal is generated on a day when the closing price of the stock fell down from the last buying price %p percent.

Formula

IF STO%K >= STO%D
THEN GO LONG
ELSE
IF STO%K <= STO%D
OR C(t)-BUY_PR < - BUY_PR*p/100
THEN GO SHORT
where STO%K is %K fast stochastic oscillator;
STO%D is %D fast stochastic oscillator;
C(t) - closing price; p - percentage loss
BUY_PR last buying price;

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